v3.26.1
Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
6.
Income Taxes

The following table presents Devon’s total income tax expense and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.

 

 

Three Months Ended March 31,

 

 

 

2026

 

 

2025

 

Earnings before income taxes

 

$

166

 

 

$

646

 

 

 

 

 

 

 

 

Current income tax expense (benefit)

 

$

(188

)

 

$

96

 

Deferred income tax expense

 

 

234

 

 

 

41

 

Total income tax expense

 

$

46

 

 

$

137

 

 

 

 

 

 

 

 

U.S. statutory income tax rate

 

 

21

%

 

 

21

%

State income taxes

 

 

3

%

 

 

1

%

Other

 

 

4

%

 

 

(1

%)

Effective income tax rate

 

 

28

%

 

 

21

%

On February 18, 2026, the IRS issued additional interim CAMT guidance through Notice 2026-7 (“the Notice”). In addition to other provisions, the Notice includes a new Adjusted Financial Statement Income (“AFSI”) adjustment beginning in 2025 for amortization of domestic research costs, including accelerated amortization under the OBBB transition rule. Accordingly, Devon's first quarter 2026 income tax expense included a current tax benefit of approximately $218 million and a corresponding deferred tax expense associated with the deferral of income taxes resulting from the Notice.